Couche-Tard halts Caltex Australia’s bid due to economic uncertainty

The company may re-engage with the $5.6 billion transaction once there is sufficient clarity on the global outlook of fuel and convenience retail industries.

Alimentation Couche-Tard Inc. decided not to proceed with the A$8.8 billion ($5.6 billion) takeover bid for Caltex Australia Ltd due to the economic uncertainty and the impact of the COVID-19 crisis.

Couche-Tard said in a press release that while it had secured the necessary financing to move forward with the transaction, the company was not in a position to make a revised proposal for formalizing the acquisition of the entire Caltex business at this time.

The Canadian convenience store operator may move forward with the transaction once there is sufficient clarity on the global outlook, as Caltex remains an important part of its Asia Pacific expansion strategy.

"We remain convinced of the long-term financial and strategic merits of an acquisition of Caltex and all the benefits it would offer to the shareholders of both companies. Our current plan would be to re-engage the process once there is sufficient clarity as to the global outlook, and the work done to date should mean that we will be able to quickly formalize our proposal at that time," said Brian Hannasch, President and Chief Executive Officer of Couche-Tard.

Caltex said in a separate statement that it remained well-positioned as an independent business, and that it would be willing to consider any future approach. “We remain confident in the strength of Caltex as an independent business, and should we receive an approach in the future would be willing to consider it on its merits,” said Caltex Chairman, Steven Gregg.